Statement of Joyce Larkin, Vice President, Public Affairs and Community Relations, Ovations, UnitedHealth Group

Testimony Before the Subcommittee on Health
of the House Committee on Ways and Means

May 04, 2006

Introduction

Ovations, a business unit of UnitedHealth Group, is pleased to submit this testimony to the Subcommittee on Health for its consideration.  Ovations is solely dedicated to meeting the healthcare needs of individuals age 50 and over, including those who are Medicare eligible, people with lifelong chronic conditions, the frail elderly and people who are disabled.

Our company has a long-standing commitment to enhancing health care for older Americans and other Medicare beneficiaries.  In fact, we provide the most comprehensive array of health and well-being services to these populations through the traditional Medicare fee-for-service program, health plans, and demonstration projects for the frailest Medicare beneficiaries.  Our participation in Medicare programs is fundamental to our core mission: to facilitate broad and direct access to affordable, high quality health care that results in improved health outcomes for individuals, families and communities. 

As you know, Ovations/UnitedHealth Group is the only company to currently offer the new Medicare prescription drug benefit in all 50 States, the District of Columbia and each of the U.S. territories covered under the Part D program. A little over four months ago, Medicare beneficiaries who were enrolled began using the new Medicare prescription drug benefit. 

Since January 1 we have processed approximately 50 million prescription drug claims, with beneficiaries yielding savings consistent with the Centers for Medicare & Medicaid Services’ (CMS) estimate of $1,100 per year for beneficiaries who previously lacked prescription drug coverage.  As CMS recently reported we are the leading sponsor in terms of enrollment for both stand-alone Medicare Prescription Drug Plans (PDPs) and Medicare Advantage Plans with Medicare Prescription Drug Coverage (MA-PDs).

With our experience in working with CMS and Congress to implement the new Medicare drug benefit, we believe we can continue to offer a valuable perspective as this Committee exercises its oversight in evaluating the new Medicare prescription drug program.

Early Challenges

Implementing a program of such unprecedented size and scale is an enormous task and has not been without challenge.  CMS has reported the Medicare Part D program is now contributing to the well-being of more than 30 million beneficiaries as of April 18, including more than eight million Medicare beneficiaries enrolled in PDPs who have signed up individually for prescription drug coverage. As of March, more than 4.5 million enrollees were participating in Part D through our PDP and MA-PD plans.  CMS reported as of the end of April that nearly 3.8 million beneficiaries were enrolled in our stand-alone Part D plans.  Approximately one-third of these beneficiaries are dual eligibles.

While these numbers and statistics demonstrate the Medicare Part D program is working for millions of Medicare beneficiaries, we share the Committee’s concern that, in some cases, the system has not worked well for all beneficiaries. This was especially true for low-income and dually eligible enrollees, largely due to unanticipated information gaps in the system.  At the outset of the program, information on eligibility was not available to pharmacies for certain duals and other low-income beneficiaries in the way it should have been, primarily due to:

• Incomplete enrollment and eligibility information received by the health plans and delays in its transfer among CMS, health plans and pharmacies; and
• Late-month enrollments and switches from one plan to another by duals and other low-income beneficiaries leading to delays in posting eligibility information in the system. 

The resulting challenges in determining eligibility led to people not being found in the system or their temporary classification in a standard low-income coverage tier, making their initial co-payments higher than expected.  It also resulted in an unanticipated surge in call volumes, creating delays in response to both consumers and pharmacists.

Responding to the Challenges

We have done, and are continuing to do everything we can to work with CMS, the Social Security Administration, states, pharmacists, and other partners to help resolve outstanding enrollment and information technology system issues.

Early on, when we recognized there was an issue with certain beneficiaries such as duals and other low-income individuals accessing their benefits, we acted quickly to ensure that these individuals would have immediate access to their Part D benefit regardless of whether they appeared immediately in the system, including:

• Activating a beneficiary’s plan coverage by “assuming” or “deeming” an individual’s enrollment even before receiving confirmation of enrollment from CMS, where possible;
• Assigning beneficiaries to a subsidized co-payment class even in advance of a CMS confirmation;
• Lifting on a temporary basis prior authorization and step edit requirements on almost all medications in order to give pharmacists and enrollees ample time to adjust to their new Part D plans.  We retained prior authorization on a very small number of drugs for which our Pharmacy & Therapeutics Committee has special safety concerns for older adults; and
• Dramatically increasing call center staff available to assist beneficiaries and pharmacists by resolving issues related to the program’s early data problems.  As a result of these efforts, we are pleased to report for the month of March that we received over 1.3 million calls from beneficiaries, while achieving an average speed to answer of approximately 15 seconds and a less than 1.5% abandonment rate.  Our call lines dedicated to supporting pharmacists achieved similar levels of performance.

While many of these early implementation problems seem to be behind us, we are mindful of the challenges ahead in ensuring that the Part D implementation proceeds smoothly.  That is why we continue to be focused on working more closely with pharmacists, including community pharmacists, on our own and through our trade association.  We appreciate the important role that pharmacists are playing in the implementation of the new Medicare drug benefit.  Our work with them has included, among other actions, making rapid improvements in call center operations, enhancing pharmacist support, and developing temporary solutions to meet the needs of low-income beneficiaries while longer-term problems are being resolved.

We also have understood the need to proceed gradually as we move beyond issues related to Part D’s initial implementation.  As an example of this understanding, we have taken a very gradual, phased approach to the end of the extended 90-day transition period.  Our approach is to phase in utilization management programs over a period of months, beginning with requirements important to determining whether a drug should be billed under Medicare Part B or D.  It also involves eliminating a number of requirements entirely and “grandfathering” beneficiaries for many medications.  By grandfathering we are able to permit individuals who accessed certain drugs during the extended transition period to remain on these drugs without having to initiate an administrative request known under Part D as a coverage determination.

Our approach to preparing for challenges also extends to our planning for the May 15 enrollment deadline.  We are pleased to report that we continue to receive an extremely high volume of enrollment applications, by mail, telephonically, and over the internet.  We expect these volumes to increase as the May 15^th enrollment deadline approaches.  In order to meet this continued strong demand for our program and ensure high levels of service, we are taking steps to ensure that our call centers are appropriately staffed and ready.

• We now have more than 3,600 call center representatives deployed at multiple call centers.  This represents a 50% increase in our staffing levels from November.  For May 15, we are also increasing our call center staff rotations, expanding our call center hours so that representatives are available to assist with enrollment questions 24/7, and are using our experience from January to learn how to better “load balance” calls between our various call centers.  As a result of these actions, we feel very confident going into May 15 that Medicare beneficiaries will find enrolling in one of our plans an easy and pleasant experience. 

Finally, we appreciate the continuing need to work closely with states as Part D’s implementation continues.  In this regard, we appreciate the steps that were taken by states in the early months of the program to help address gaps in coverage for low-income beneficiaries.  We also appreciate the vitally important work that State Health Insurance Assistance Programs (SHIPs) continue to undertake in assisting Medicare beneficiaries in understanding the Part D program and their enrollment options.  The importance of states to the Part D implementation and SHIP offices in particular was driven home to us a few weeks ago when, as many of you know, we mailed out late payment notices, based on a CMS model, to a number of our enrollees.  While our intention in sending the notices was to encourage members to contact us with any issues or concerns about their Part D payment status or selected payment method, this intention was not well communicated and generated many calls from beneficiaries.  While we ultimately spoke with more than half of the beneficiaries who received a notice, it was the SHIPs that served as the first line of defense in receiving these calls, and, as we have communicated directly to all SHIP offices, we appreciate greatly the efforts they undertook to assist our members.

Our Commitment

Most important as we look ahead to Part D’s continuing implementation is our commitment not just to the program, but to the people we serve.  We have reached out to Medicare beneficiaries in communities across the nation to help them understand the new Medicare drug benefit and our campaign to do so is ongoing.

Well before January, we engaged in a broad national educational campaign about Part D.  The goal was to ensure that individuals eligible for the Part D benefit would understand their options and know how to access and make full use of the new prescription drug benefits available to them under Medicare. 

As part of this effort, we developed an educational consumer booklet known as the Show-Me Guide.  We published the Show-Me Guide in seven different languages (English, Spanish, Chinese, Russian, Vietnamese, Korean, and Tagalog) and distributed more than 10 million copies of the Guide  to consumers, providers, advocates, and governmental representatives at both the state and federal levels.

We are honored and appreciate the opportunity to work in partnership with national and community-based organizations on this important initiative.  Our partnerships have included, but are not limited to, Representative Donna Christensen and the members of the Congressional Black Caucus; Reverend Jesse Jackson and the Rainbow/PUSH Coalition; the National Kidney Foundation; the National Medical Association; and the American Association of Services and Homes for the Aging.  These partnerships have resulted in more than 400 Medicare Part D education and outreach events being held.  In some states such as Illinois, we have participated in more than 50 Medicare Part D education events.  Many of the organizations with which we have partnerships have asked if we would be willing to continue to work with them to make certain that Medicare beneficiaries are receiving information on an ongoing basis.

We continue to be encouraged by the stories we hear every day about people receiving prescription drug coverage for the first time and about seniors who are keeping more money in their pockets through the cost savings realized under their new Medicare Part D Plan.  We have worked with thousands of people across the country on a one-on-one basis, educating them about the benefits of the Part D prescription drug program.  

People like Fran Cooper, a Medicare beneficiary in Nebraska who enrolled in the AARP MedicareRx Plan.  Fran, who was initially skeptical, now saves money each month on her prescription drugs.  Fran has become a Medicare Part D "champion."  She is participating in events with the Congressional Black Caucus, the National Medical Association and other groups to educate African-Americans and communities of color about the new Medicare drug benefit.

Betty Nord is a Medicare beneficiary in Wisconsin who was attracted to our Medicare Complete product, one of our Medicare Advantage Plans.  She liked the product because it offered the new Medicare prescription drug coverage with a zero premium.  Betty is now enrolled in Medicare Complete and estimates that her medical costs have been reduced dramatically from approximately $9,000 to $2,000 per year. 

And then there is Barbara Stetson, an 81-year old Medicare beneficiary who lives in Maine.  Ms. Stetson took the time to send a special "thank you" letter, because having the Medicare drug benefit is making a substantial difference to her.  Before enrolling in the AARP MedicareRx Plan, Barbara was not taking her medications appropriately, simply because she could not afford to buy them.  She now has peace of mind and the prescription medications that she needs each day.

In addition to providing beneficiaries immediate savings, Part D coverage is providing seniors and others eligible for Medicare with a safety net in case they ever would need it.  The knowledge that they will be protected if their situations change and their drugs costs rise offers Part D beneficiaries some peace of mind – a truly valuable benefit for both individuals and their  families.

We believe that the Medicare Part D benefit is helping to make affordable prescription drug coverage available to millions of seniors and disabled individuals, including those who previously would not have qualified for assistance through other federal or state programs.

Consistent with our commitment to our enrollees is our philosophy regarding plan design.  Ovations strove to ensure that our formulary was one of the broadest, most open and non-restrictive.  Ovations’ formulary as we developed it covers 100% of CMS’ top 100 volume drugs without requiring prior authorization.  It also is one of the few formularies to include all 178 Part D covered drugs that the Health and Human Services’ Inspector General reports as most commonly used by dual eligibles.  And, the Ovations formulary originally contained just 39 drugs with prior authorization requirements and five with step therapy requirements.  Again, as indicated, we temporarily suspended these requirements for all but a few drugs in order to give pharmacists and enrollees ample time to adjust to their new Part D plans.  As mentioned, some of these requirements have now been removed entirely, and others are being gradually phased back into place.

Still More to Do

Despite the start-up issues, there is much good news to talk about with respect to the Part D program.  However, our work to make the program succeed for all beneficiaries, and very importantly to ensure that those who need it most are signing up, is by no means finished.  We are resolute in our commitment to help deliver on this promise for all beneficiaries.

Critical in this regard is the particular importance of helping lower-income individuals, especially those not eligible for Medicaid, understand the value of enrolling in Part D.  There are an estimated six to eight million low-income people who should qualify for subsidies under Part D but are not eligible for Medicaid.  These are people who likely have no prescription drug coverage and stand to benefit most from a reliable source of coverage that makes prescription drugs available to them on an affordable basis.  To accomplish this objective, it is important that we join together to reach out to these beneficiaries, clarify any misperceptions about the program, and remove whatever barriers exist to their enrolling in Part D.

Conclusion

In conclusion, we would like to say that we believe the Medicare prescription drug program is working well for the vast majority of beneficiaries.  Enrollees in UnitedHealth Group/Ovation’s Medicare Part D plans are realizing significant savings and report a high degree of satisfaction. And the program overall, as CMS has reported, is delivering access to medications for millions of beneficiaries while yielding significant savings.

Ovations/UnitedHealth Group is committed to working with you, CMS, the Social Security Administration, states, pharmacists, and beneficiaries to address current and future challenges.  We are determined to do all we can to fulfill the promise of this ambitious and valuable program.  We hope that we can be a constructive force to that end and look forward to working with you in the months to come.  We especially appreciate the Committee’s leadership on this important matter and thank you for the opportunity to share our thoughts.